Toronto, Jan 19, 2021 – Lockheed Martin is one of the largest companies in the aerospace, military support, security and technology industries. According to revenue in fiscal year 2014, it is the world’s largest defense contractor.
In 2018, 78% of Lockheed Martin’s revenue came from arms sales. Ranked first among the top contractors of the US federal government and received nearly 10% of the funds paid by the Pentagon. In 2019, US government contracts accounted for $38.4 billion (85%), foreign government contracts accounted for $5.8 billion (13%), and commercial and other contracts accounted for $900 million (2%).
Half of the company’s annual sales come from the US Department of Defense. Lockheed Martin is also a contractor for the U.S. Department of Energy and the National Aeronautics and Space Administration (NASA).
In today’s environment, defense companies seeking to survive face the need for self-management and cannot guarantee long-term commitments. Although high-profile strategic alliances such as the Lockheed Martin Marietta-Lalar merger and Boeing-McDonald Douglas and Thor Hughes have made headlines, the industry is still making more fundamental Transformation. Those familiar with the industry have observed that the impossible has become commonplace and the incredible is almost inevitable.
There is no doubt that the US defense industry and many other industries require companies to combine with former competitors and develop new survival strategies. Lockheed Martin has learned many lessons because it added combat scars to its combat belt. The most important lesson is self-evident: There are only two types of companies. Those that are changing and about to close down.
In the global turmoil of the aerospace market, survival has become a role that people dream of, even for large companies like Lockheed Martin.
Despite the decline in defense spending, Lockheed Martin’s stock price has almost doubled in less than two years after being listed on the New York Stock Exchange. In short, Lockheed Martin has been growing while other companies are shrinking, which makes many people wonder how they did it.
The upheaval provides a rare opportunity to initiate major changes throughout the enterprise, and these changes may make future restructuring efforts unnecessary. The most fundamental changes in the aerospace industry so far have been led by Kent Kresa, who was the company’s former chief executive Northrop (Northrop) Chief Executive Officer.
In order to achieve dramatic changes, it is important to set seemingly unachievable goals, motivate people to achieve these goals, and provide them with resources to achieve their goals.
Lockheed Martin has closed about 16 million square feet of factory buildings, which accounted for about a quarter of the total area of its original factory buildings. Lockheed Martin’s collective labor force has been reduced by more than 100,000, making their labor force possible by two-thirds.
Only through restructuring, they can generate about 2.6 billion US dollars in recurring savings each year, accounting for about 10% of their overall operating costs, which does not include the additional savings generated in the course of normal operations.
After focusing on manufacturing aircraft for decades, the industry has come to realize that the items on the aircraft must be replaced more frequently than the aircraft itself. To succeed in such a market, we need to get rid of the limitations of becoming a major aircraft manufacturer. Today, electronics and other technological upgrades have become the focus of Lockheed Martin’s business scope.
Lockheed Martin realizes that technology is a moving target, and they act accordingly.
Throughout the restructuring process, setting goals, monitoring progress, and providing feedback are crucial. The final quantitative result is also very important.
Maintaining business performance requires first establishing important indicators, such as financial results and process indicators, and then recording them and sharing them with employees who can use that knowledge.